In Our View …
As we watch organizations attempt to understand and cope with the demands of a rapidly changing environment, we are struck by how often senior leaders are frustrated by the inadequacy of their current strategy. They express a queasy feeling their strategy somehow seems to fall short of what is necessary to actually meet the challenges of the moment.
In short, we see a lot of bad strategy. We agree with Dr. Richard P. Rumelt of The Anderson School of Management at UCLA. Many organizations operate with a primitive understanding of what strategy really is, what it means and what it can achieve. As he suggests, there are too many organizations confusing bold ambition with good strategy. They make great pronouncements to the market, their customers and their employees about how they will be the biggest “this” or the greatest “that”, but those pronouncements are not strategy.
We believe it’s time to make different choices. We see the demise of charisma and bravado as the fuel for energizing strategy. In its place, we see the rise of candour, coherence and courage, combined with a conviction to overcome blind spots, eliminate biases and get to the truth.
In our view, it begins with identifying some hallmarks of bad strategy.
- An abundance of fluff, exaggeration and hyperbole
- Failure to address the core challenges or wicked problems
- Mistaking cascading goals and detailed objectives for strategy
- Setting weak objectives that do not change the fundamental condition
Encouraging Strategic Honesty …
Developing coherent, game changing strategic plans, and setting a clear, bold, long-term direction, have long been considered the highest priority and responsibility of senior executives. Unfortunately, two questions come to mind in the midst of the current economic conundrum.
First – How effective is the strategic planning process?
Second – What gets in the way of improving both the process and the outcome?
We don’t believe most organizations would, objectively, receive Top Grade for their strategy. There are very few Apples or IKEAs, but is there really a good reason why the rest of us cannot achieve that same dominating level of credibility? The answer is that most strategies may be good enough to get by, but they are not good enough to differentiate, to set the pace and to dominate the space. In other words, they are not strategies at all, rather a collection of tactical goals and objectives, conveniently clustered together under a banner called a Strategy.
Strategy setting, when taken seriously, should be about the clear identification of the “wicked problems” a company needs to address to gain a competitive advantage, and then a declaration of intent to tackle them in a focused way. In other words, it begins with the identification of a compelling, perhaps chronic problem or anomaly that needs to be resolved – now!
By its very nature, a strategy setting discussion is an argument, a point of view. It should, in fact, attract criticism and maybe even ridicule. It should destroy old ideas, paradigms and beliefs. In order to build a great strategy, there has to be vibrant debate. If the objective is to craft superior strategy, then there is a desperate need for greater honesty in the discussions surrounding it.
Building a Culture of Candour …
Whether you love him or hate him, there is little doubt Jack Welch was a great success as the C.E.O. of General Electric. He is even better known today for his views, opinions and pronouncements on leadership. One of the most compelling statements he has ever made is on the lack of candour in organizations or what he calls “superficial congeniality”. In his books and speeches on this subject, he talks about the harm done when organizations fail to be brutally honest with themselves.
Strategy is serious business. It deserves total candour. Candour must be encouraged, developed, modelled, supported and rewarded. Unfortunately, we don’t know of too many cultures where that really is the case and it may be fewer today than two years ago.
We think inferior or bad strategy generally has something to do with a lack of willingness to be honest about the fundamental strategic challenges. It is a conflict avoidance tendency. A belief in pumping up assets and good news, rather than admitting liabilities and sharing the bad news. This deficit in thinking and behaviour reveals itself as a failure to state the worst fears or admit the underlying challenge. It is the inability to call out the primary challenge and ask people to rally around solving it. All too often, the tendency is to strive for a beautifully concocted, vanilla coated form of consensus that may feel good, but which generally does not produce superior results or competitive advantage.
In our view, no matter how painful the worst truth is, it is still better than the best lie.
Identifying the Pivot Points …
Military and political history are full of examples in which a leader (often against all odds) has used a set of bold strategies to out manoeuvre the opposition. In almost all of these cases, victory came because there was a particular moment at which the leader made a critical decision that, in retrospect, became the evident and eventual pivot point. A deciding action that shifted the momentum and placed the organization on a course for victory.
So it is with business strategy.
These pivot points are not accidental or random decisions. They are deliberate, defining moments of unique and disproportionate advantage. They arise because there was a decision made to focus the effort of the organization in an extraordinary manner on a single outcome or “bet”. This focus is what provides the necessary leverage to tip the scales. In business, we are not particularly good at the kind of singular focus needed to take advantage of these pivot points. It seems we have a need to mitigate all of the risks associated with the big decision. As a result, we never quite make the commitment necessary to take full advantage. In other words, we hedge our “bets”, rather than aggressively exploiting opportunity.
One of the reasons we do is this is because we are constantly searching for a full understanding and perfect balancing of all the variables, before we act. While this might be an appropriate course if we want mediocrity – it is not the way in which organizations come to dominate their space or change the course of history.
The point here is that strategy should be a choice – a clear, crisp deliberate choice – and, as such, should receive a disproportionate amount of our attention, focus, effort and resources. In order to be effective, the entire organization must have a laser beam focus on a particular course of action, the foundation of which lies at the very farthest reaches of our understanding.
Strategy as Problem Solving …
There is a huge and important difference between strategy, in the way we are talking about it here, and the goals, objectives and tactics we see in most Strategic Plans. We believe this important difference is not well understood. As a result, we can find ourselves being easily seduced into calling something a Strategy when it is not.
Put simply, strategy should be about problem solving. It should be about identifying the most difficult, thorny, “wicked” problem and deciding to apply maximum attention and effort to it. It requires the courage to acknowledge the problem in the first place, to shine the bright light of attention on it and must be combined with the will to make it the center of everything that is done.
First – it takes a proactive, candour-seeking leader to help the organization take the first step of “admission” or acknowledgement. In many cases, this first step never occurs, simply because the leaders and the organization are afraid to work hard enough to dig out the weak points and put them on the table.
Second – it’s kind of like the old saying, “ignorance is bliss”. So many executive teams do not seem willing to have the necessary, sometimes painful, exploratory discussions to find the deeply hidden “secret”. They hope by avoiding it, or pretending it is not there, that maybe it will just go away.
Finally – there is the question of the ruthless, deliberate focus necessary to take advantage of the pivot point, which is only an advantage if you find it in the first place. When you do, you then have to be willing to devote everything you have to resolving it quickly and boldly.
The best strategic discussions should be about how best to get “unstuck”.
Opportunity Sensing …
There is a unique aroma that comes with the sensing of an opportunity. It is part adrenaline, part fear and part excitement. It is the same emotional high that comes with being close to inevitable victory in a sporting match. It is the point at which everything slows down, your vision becomes crystal clear and the necessary effort seems effortless, because you can taste victory.
In business, these moments are rare. They may be found, for example, in the thrill of an acquisition, but seldom are they part of the organization’s DNA on a day-today basis. The strategic challenge is to create these same “highs” by channelling the organization’s adrenaline on a common cause that replicates the emotion of anticipation. Because these unique opportunities lie at the very edge of our understanding and tend to present themselves at inconvenient moments, it becomes easy to “take a pass”. Good strategy never allows that to happen!
These are exactly the strategic inflection points that Andy Grove at Intel spoke about years ago. They are the pivot points that create the disproportionate advantage that allow an organization to dominate an opportunity and shape it in their own way, to the distinct disadvantage of their competitors. This kind of strategic opportunism is very seldom logical and there is usually no precedent. All of this is exactly what makes it so important the opportunity be converted into a clear, focused strategy.
Opportunity sensing is about taking advantage of the anomalies. Opportunity sensing is about staking a claim on an unknown piece of land. Opportunity sensing is knowing, in your bones, that what you are about to do just feels right.
It is the organizations that can get comfortable with this line of thinking that will be able to take advantage of the opportunities presented by the disequilibrium in which we all find ourselves today.
Value of Coherence …
Leading an organization is never easy, let alone in times of uncertainty. The only way to help ease the pressure and the stress as you accelerate out of the corner, is to ensure everything you do and say adds layers of coherence to an uncertain situation. The very best leaders are able to connect the dots in such a way as to enable others to see a more complete picture of the future and through that gain confidence and commitment.
In order to provide coherence, the leader must dramatically and permanently turn down the noise level in the organization, eliminate any unnecessary distractions and banish the fear of uncertainty. This is best accomplished by reducing the wide scope of attention and committing to a narrower, sharper set of strategic imperatives. In other words, banishing all the extraneous activities in order to dedicate the organization on a singular focus.
In order to get your organization properly coordinated in time and space, you need to hone the focus such that no matter how far in the future you are looking, the picture is still clear and not clouded by the frivolous or the unimportant. It is amazing how often organizations allow themselves to become trapped by adding unnecessary layers of complexity on top of far too many priorities mixed in with pet projects and diversions. It’s a recipe for underachievement.
Focus is a choice. By definition, it means choosing one thing over another. The problem is, this trade-off is often forgotten rather than being the “quid pro quo” for making a strategic choice. As a result, the buried mole eventually raises its head and the organization diminishes the benefits of relentless focus by continuing to allow it to roam the halls.
Benefits of Saying “No” …
Curious isn’t it – how so many tough minded executives still have trouble saying “No”? This is especially perplexing since the ability to say “No” is among the most important elements of good strategy and is essential to the ability to execute the strategy. Strategy, by its very nature, is the imposition of rules to guide actions, frame decisions and make choices.
Good strategy requires the ability to say “No” to those things that get in the way of total focus. The ability to say “No”, to call off wasteful energy draining initiatives, to abandon those activities that are peripheral to the mission, is a critical discipline and a key competency of the strategic leader. The fact is, any good strategy involves trade-offs, choosing one course of action over another. It’s when we allow the lines to blur or overlap that we get into trouble. We send mixed signals, we misallocate resources and we add fuel to the silo mentality of turf protection.
Strategy is about magnifying the effort of the organization to pursue an ambitious objective. In order to do so, we have to make the hard black and white decisions that clear the path for total commitment. In too many organizations, there is a belief that by somehow dividing or spreading our efforts, we are hedging our bets and reducing risk. We would argue just the opposite. Allowing too many priorities to flourish, allowing too many executives or departments to put their agenda first effectively starves the most important things of oxygen. As a result, it actually increases the risk of total failure or suboptimal performance because the full force and weight of effort is not committed to what really matters.
Eliminating Fluff …
Quite frankly, we are shocked by how often leaders feel the need to nail a fancy slogan above their strategic plan. It is as though they believe it is necessary to wrap the strategy in a few simplistic emotional words to galvanise the organization, to help make it understood by the masses. Why not just make the strategy simple to understand in the first place?
- Strategy is not a syrupy slogan.
- Strategy is a bold intention.
The quality of a strategy should not be judged by the complexity of the arguments or the way in which they are beautifully packaged into dense PowerPoint presentations. All too often, this is nothing more than a fancy masquerade – an attempt to demonstrate a level of superior expertise and depth of analysis which, in its very complexity, reveals its false promise. There is no place for fluff and illusion in a good competitive strategy.
Leaders need to overcome the intellectual temptation to embroider the strategy. Instead, they must reduce the levels of ambiguity and complexity by forcing the organization to concentrate on the core and tune out any extraneous noise. There is great beauty in simplicity. We would argue that simplicity adds coherence to the plan and, as a result, allows greater flexibility in striving to reach the optimal outcome.
Leaders have to be fully alert and relentlessly attentive to the ill-considered propositions that are put forward, usually based on the most flimsy of evidence and elaborately concocted arguments. It is about focus, relentless focus. This can only occur when the culture proves itself willing to eliminate light weight fluff masquerading as important strategy.
Steps to Take :: Actions to Consider
Over the past several years, the swamp has drained and the hidden rocks should now be visible. What better time to declare war on the things that don’t really matter. Instead, we still find organizations hunkered down for survival, not rising appropriately to the challenge at hand.
It is as though the greater the uncertainty and instability in the market, the less willing leaders actually are to stare down the “devils” within their own organization. The less willing they are to deal with the things holding them back and getting in the way. The less candour they have to tackle the issues that make a real difference.
Strategy is ultimately about developing a radically new point of view. A new way of looking at the world and defining success. Opportunity arises as these viewpoints shift, affording you the opportunity to destabilize and disorient the competition.
Here is a list of pointers to help get you started.
Dig Deeper – Much Deeper
If your resolve is to get straight answers to the “wicked problems” hidden just beneath the surface, the search will depend on how willing you are to do the heavy lifting necessary to find them. Begin by making sure you have selected the right people to help you think, probe and discover and provide them with the
necessary air cover they need and deserve
Ask Tougher Questions
Mining for the hidden issues, dilemmas and incongruities lurking in your organization will require more penetrating questions than you have ever been asked before. The questions need to be questions of exploration. Questions focused on the unknown territories – and you have to be prepared to follow the line of thought, no matter where it takes you.
Check the Numbers
In this new world of hypercompetition, you will need to change how you analyze the conditions. This means examining the data you have in hand in new and more interesting ways. Then, just to add another level of tension, you will need to seek out new information from new places and in new combinations.
Call it Out
Organizations tend, over time, to take on the characteristics of their leader. If there is a meaningful shift to be made in the way strategy is conceived, then the leader will have to model new behaviours. This very likely means an overt, visible commitment to calling out the superficial arguments that do not hold water and putting an end to the timid, evasive responses to the tougher questions. Raise the bar. Increase the standards. Demand better.
Ensure Ample Air Cover
It is a fact of human nature we can become easily distracted when we allow our minds to wander. At the organizational level this is multiplied several times and, very soon, we have a complex maze of conflicting, opinions, priorities and messages. The trick is to eliminate the excuses people use to divert their energy and attention. Sharpen up the messaging. Simplify the strategy.
Go Big or Go Home
Business is about balancing risk with market need and opportunity. As we have been forced back onto our heels by recent economic events and circumstances, many have tried to lessen the risk by reducing their field of vision. They have justified a hunker down strategy by promoting it as the safest thing to do. Strategy is an offensive weapon. Get out of the bunker and get back in the game.